What Is Business Development? How It's Different From Sales

In its most basic form, business development can be defined as the creation of value for an organization or business.

This includes brainstorming new ideas, initiatives, and activities to increase profitability. The goal of business development is not just to increase profits, the goal is to make intelligent business decisions that create value for organizations and customers.

This is part one of our business development educational series.

“So you’re in sales?” is usually the response when telling someone I work in business development. While that assumption isn’t necessarily wrong, it’s not entirely correct either. As I’ve begun to frequent more networking events, I have learned that not many people outside of tech know what I do when I go to work every day.

Business development is a term that often can be quite unclear and change in meaning depending on who you’re talking to. Almost everyone is familiar with the basic functions of different teams across an organization –- sales, engineering, finance, etc. However, when it comes to “biz dev,” there is a level of ambiguity surrounding the true meaning of the term and what responsibilities individuals with the title have.

That being said, in this article, we’ll take a look at what business development is and how it’s different than sales.

What is business development?

So for starters, let's define the term.

Although this formal definition is straightforward, it lacks the ability to paint a clear picture of what function a business development team serves within an organization. 

What does a business development representative do?

There is one core responsibility of business development: growing your business. The strategies to operationalize and accomplish this goal will vary greatly across industries, but the idea is generally the same for all companies.

Business development professionals need to stay knowledgeable about the current market in order to target opportunities for growth effectively. This means having expert knowledge of your target audience and engaging with (yes, this means cold-calling) prospects in order to generate new business.

Every business needs to acquire new customers to grow, but not every potential customer will be the right fit for your business. Evaluating whether or not a prospect is qualified to buy what your business is selling is essential to business development.

Day to day, these prospecting activities are carried out by teams of sales or business development representatives (SDR or BDR for short).

BDRs are responsible for prospecting and qualifying leads before handing them to the sales team to nurture the relationship and close the deal. This process is crucial in keeping the company’s revenue engine running and creating long-term value. 

How business development representatives qualify leads

Every business has a target audience they wish to reach – in other words, they have an ideal prospect they want to sell to. Often, this is based on what your existing customer base looks like and is defined using a customer profile.

One of the most commonly used qualification frameworks that exist today is called BANT, which stands for:

• Budget: Does the prospect have available resources to invest?
• Authority: Is this prospect the ultimate decision maker?
• Needs: What are the biggest problems that this prospect is looking to solve with my product?
• Timeline: How soon are they looking to buy?

It’s necessary for business development reps to become subject matter experts on the set criteria they are given for qualifying prospects. This ensures that every sales opportunity they set up has a higher probability of closing and will move down the funnel more quickly. 

Sales vs. business development

Although sales and business development aim to grow new businesses, the roles differ greatly and serve distinct purposes.

Earlier in this article, we learned that business development is essential to the sale process. The BDR team is responsible for pushing qualified leads further down the sales funnel, but they do not close deals themselves.

That’s where sales come in. 

The primary function of the sales team is to generate revenue. Sales reps are responsible for demonstrating the product, negotiating, and eventually closing the deal. Converting prospects into customers is much easier to accomplish when sales and business development work together to streamline the sales process. 

Separating these two roles within a company allows each team to specialize in their specific function and help grow the business more efficiently.

Both of these roles require a similar set of skills — this allows for career development opportunities for BDRs who want to move into a closing role down the line. The relationship-building skills learned in the business development position are easily transferable and build a foundation for the skills necessary to succeed in sales, marketing, or customer success.

Many business development teams operate as a subset of the sales department and are held to similar metrics. Next, we’ll look at how to measure success in business development. 

Measuring the impact of business development efforts

Sales metrics for a business development team will vary based on what a company’s sales cycle looks like. Since the primary function of the role is to generate new opportunities to sell, one of the easiest ways to quantify this data is by looking at the BDR-influenced sales pipeline or the number of potential deals created as a result of business development efforts.

Many BDR teams hold quotas that align with the company’s overall revenue goals. In order to achieve revenue goals (that rest on the shoulders of the sales team), business development has to be consistently generating a healthy pipeline.

Although metrics vary by company, common ways to track BDR activity are through prospecting activities (cold calls and outbound emails), the number of appointments booked, and the amount of sales pipeline generated. All of this data is normally stored and tracked using CRM software. 

Where does marketing fit in?

While it may not seem like there’s much alignment between marketing and business development, it’s important that both teams are in sync and working together in order to achieve the common goal: growing the business.

Marketing’s main responsibility is to promote the brand and establish a market presence. This is accomplished through various communication strategies (content marketing, advertising, public relations, etc.) and measured in various ways. The key marketing metric that ties into business development is lead generation

Final thoughts

There isn’t a one-size-fits-all definition of business development. However, knowing the basics is the first step in understanding what exactly these “biz dev” people do and how it all fits within the big picture of a growing organization.

In today's fast-paced and highly competitive market, traditional methods prove inadequate. Learn more about business process management to maintain a competitive edge.